AHCA could put 6.3M people at risk for higher premiums

An amendment in the House version of the American Health Care Act allows insurers in states that opt for a waiver to vary individual market premiums based on health status for an entire plan year for people who had a gap in coverage of 63 straight days or more in the past year. (Getty/designer491)

Under an amendment included in the American Health Care Act, 6.3 million people with pre-existing conditions could see a spike in their health insurance premiums, a new analysis estimated.

The amendment, authored by Rep. Tom MacArthur, R-N.J., and Rep. Mark Meadows, R-N.C., would allow states to opt out of the Affordable Care Act’s “community rating” provision that prevents insurers from basing premium rates on individuals’ health status. In order to do so, states must figure out a way to lower costs for higher-risk enrollees, such as setting up a high-risk pool or reinsurance program.

Though the amendment ultimately helped the House to pass its healthcare bill, it also drew sharp criticism—especially from healthcare trade groups.

And that criticism may be warranted, according to the Kaiser Family Foundation’s new analysis.

The MacArthur-Meadows amendment, it noted, allows insurers in states that opt for the waiver to vary individual market premiums based on health status for an entire plan year for people who had a gap in coverage of 63 straight days or more in the past year.

In 2015, there were a total of 27.4 million of those individuals, the analysis found. Of that total, 23%, or 6.3 million, had pre-existing conditions that would lead them to face a “substantial premium surcharge” if they live in a state that chooses to waive the community rating rule.

The version of the AHCA passed by the House does include $8 billion in funding over five years to help states reduce costs for people who would be affected if they opt for the community rating waiver. However, experts have said that amount likely won’t go very far.

Much would depend upon how many states would actually apply for—and be granted—a waiver under the AHCA. So far that is unclear, but some experts said even Democratic states might feel pressure to do so in a bid to keep insurers in the individual market.